President Bush, second from right, meets with John McCain, far left, and Barack Obama, far right, and congressional leaders in the Cabinet Room of the White House on Thursday. (AP)

Congressional Democratic leaders wasted no time pointing the blame at House Republicans and in particular Republican presidential candidate John McCain after a tentative deal on the $700 billion financial sector bailout proposal blew up following an afternoon meeting at the White House.

“I would suggest that anyone in that meeting who tried to understand what John McCain said at that meeting, couldn’t,” Senate Majority Leader Harry Reid of Nevada told reporters Thursday evening.

McCain suspended his campaign to return to Washington D.C. to take part in negotiations on the bailout. Barack Obama also returned after President Bush requested he attend today’s meeting. Reid suggested McCain’s return injected politics in to the negotiations. McCain was the last one to speak at the White House meeting, Reid said, and he “didn’t say anything substantive.”

“John McCain did nothing to help, he only hurt the process,” Reid said, further chastising McCain for calling for a delay in Friday’s presidential debate in Mississippi. “We should not let this little effort to avoid participating in the debates sidetrack this most important issue,” Reid said.

Growing resistance among House Republicans played a greater role in stalling negotiations, as a faction of GOP lawmakers released principles for a competing bailout proposal as it became increasingly clear that the tentative agreement did not have broad support in the House Republican Conference. One House Republican aide estimated that no more than 45 House Republicans would support the current proposal.

Key negotiators expressed surprise at the counter proposal. Reid said he was “stunned” by House Minority Leader John Boehner of Ohio who had previously expressed his support for passing a bipartisan plan.

House Speaker Nancy Pelosi has said she does not want to bring a bill to the floor without a significant number of House Republicans on board. Democrats are not keen to take political ownership of a Bush administration proposal less than six weeks before Election Day.

“If it’s going to pass, it needs to be bipartisan,” House Majority Leader Steny Hoyer of Maryland told reporters, adding that he has “confidence” that Boehner is working to that end. “I hope that his Conference will cooperate in that effort.” Hoyer declined to say how many House Republicans would have to be on board for Democrats to bring the measure to the floor.

Reid said negotiations will begin again at 8:00pm/ET tonight. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were headed back to Capitol Hill to meet with lawmakers. Reid said he asked Paulson to “do what he can” to get House Republicans on board.

“It’s all very fuzzy to us, we don’t know where we are,” House Financial Services Committee Chairman Barney Frank told reporters on the status of negotiations. Frank also suggested McCain’s return to Capitol Hill hurt negotiations.

“Sen. McCain has not been involved in this,” Frank said, noting the Arizona senator does not sit on any committees of jurisdiction and did not take place in earlier negotiations. “I think this was a campaign ploy by Sen. McCain,” he said, “He slowed it down. I don’t know if he caused it or what.” Echoing Reid, Frank said McCain should participate in Friday’s presidential debate, adding that if he doesn’t it’s “only because he doesn’t want to.”

UPDATE: “As far as I know Sen. McCain has not endorsed this plan. This is not a product of his campaign,” Virginia Republican Rep. Eric Cantor told reporters tonight. Cantor is leading the coalition of House Republicans who devised the competing plan with the consent of Boehner; he took issue with characterizations that Republicans surprised negotiators with their proposal.

“We’ve been talking about this plan for at least two days,” he said. Cantor defended McCain’s decision to return to Washington for “trying to affect the change needed” to get a bill done. “I applaud him in coming back and making sure that as a senator he is here to do that,” he said.

Inside an intense White House meeting over the financial crisis on Thursday, where nearly every key player came to an agreement on the outlines of the bailout package, Sen. John McCain stuck out. The Republican candidate, according to sources with direct knowledge, sat quiet through most of the meeting, never offered specifics, and spoke only at the end to raise doubts about the rough compromise that the White House and congressional leaders were nearing.

McCain's reluctance to jump on board the bailout agreement could throw the entire week-long negotiation into a tailspin. Sen. Chris Dodd, after leaving the White House, suggested on CNN that the tenuous process could be derailed by what he viewed as McCain's political motives.

"What happened here, basically, if you want an honest appraisal of the thing, we have been spending a lot of time and I am tired. I have spent almost seven straight days at this in trying to come out with a workout plan for our economy a rescue plan," said Dodd. "What this looked like to me was a rescue plan for John McCain for two hours and took us away from the work we are trying to do today. Serious people trying to do serious work to come up with an answer."

According to the source with knowledge of the White House gathering -- which featured both presidential candidates, congressional leaders and the President -- virtually ever key figure in the room, save McCain and GOP Sen. Richard Shelby, were in agreement over a revised version of Treasury Secretary Hank Paulson's plan.

Towards the end, McCain finally spoke up, mentioning a counter-proposal that had been offered by some conservative House Republicans, which would suspend the capital gains tax for two years and provide tax incentives to encourage firms that buy up bad debt. McCain did not discuss specifics of the plan, though, and was non-committal about supporting it.

Paulson, however, argued directly against the conservative proposal. "He said that he did not think it would work," according to the source. At another point in the meeting, President Bush chimed in, "If money isn't loosened, this sucker could go down" -- and by sucker he meant economy.

ABC News reported that, following the meeting, Paulson "walked into the room where Democrats were caucusing...at the White House and pleaded with them 'please don't blow this up.'" But this story isn't incomplete, according to sources.

Democrats stayed talking in the Roosevelt room and Paulson approached them. After his comment, Speaker Pelosi and Rep. Barney Frank shot back that the real problem was with House Republicans. Paulson replied, "I know, I know," as he got down on one knee to lighten the mood. Pelosi joked back, "I didn't know you were a Catholic."

After the White House meeting, Shelby, the top Republican on the Senate Banking Committee, restated his long-standing opposition to the bailout, and suggested that a deal was not, as reported earlier in the day, imminent. But Shelby's no. 2 on the committee, Sen. Bob Bennett, supports the compromise principles, as do other top GOP House and Senate leaders.

Dodd himself was incensed that the hard work he and others had put in could be undermined at the last minute.

"We were told it came out of the Republican House. We were told at this one point that this was maybe John McCain was floating the idea that Hank Paulson was considering it," Dodd said of the proposal, which he did not elaborate upon. "And of course Barney Frank and I, along with Republicans from the House and the Senate, had spent three hours this morning working on a different core. We were told for the last seven days it was the core issue to give the Secretary authority to move with the crisis, but simultaneously protect the taxpayers and accountability and deal with foreclosure issues all of the things the president mentioned last evening were going to be important as well."

Obama himself did not directly take McCain to task at his post-meeting press avail, but suggested that his methods were not helping the process.

"What I found and I think was confirmed today when you inject presidential politics into delicate negotiations it is not necesary as helpsful as it could be," he said, according to Politico's Carrie Budoff Brown. "When you are not worried about who is getting credit and who is getting blamed you tend to move forward more constructively."

This was so obvious, always part of the plan to support him not being at the debate. Dude is seriously scared of this economic debate. Will serve them right if the Debate goes on with only Obama there. True that would be more of a national press conference, but it would serve McCain right.

This was so obvious, always part of the plan to support him not being at the debate. Dude is seriously scared of this economic debate. Will serve them right if the Debate goes on with only Obama there. True that would be more of a national press conference, but it would serve McCain right.

This was so obvious, always part of the plan to support him not being at the debate. Dude is seriously scared of this economic debate. Will serve them right if the Debate goes on with only Obama there. True that would be more of a national press conference, but it would serve McCain right.

i guess this would be my first stance too if i wasn't so irritated by such a huge bailout in the first place.

I knew this was a trap set and the DEMS had walked right into it. If this works and McCain gets a smaller plan or a plan that does not involve taxpayer dollars then he wins the election...

The entire scenario ends up upside down. McCain bucks the POTUS and his party (maverick), defends the taxpayers and main street (populist), and takes his huge economic weakness and makes it his strength. If this works it was a brilliant ploy.

__________________Meet the new boss same as the old boss.

BigChiefDave:"Anyone who thought we would only be in Iraq for a few years is either stoned or just stoopid."
"It is unknowable how long that conflict will last. It could last 6 days, 6 wks. I doubt 6 mths." Rummy 2/7/03

__________________
"When the Know-Nothings get control, it will read 'all men are created equal, except negroes, and foreigners, and Catholics.' When it comes to this I should prefer emigrating to some country where they make no pretense of loving liberty – to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy.”--Abraham Lincoln